A car’s warranty repair is any work done on a vehicle at a dealership facility under the terms listed in the owner’s manual. Many times, there’s no charge for the work done, but there may be a modest deductible once the specified mileage or time limit has been exceeded.
Warranties have changed dramatically since their inception, from the standard “12 months or 12,000 miles” (12/12) to the long-term, comprehensive protection currently offered by manufacturers. As new-vehicle prices continue to climb, customer demands have pushed manufacturers to provide better and better product coverage.
As vehicles are leased, sold or traded in, warranty coverage can be confusing. The general rule here is that warranty coverage stays with the vehicle, not with the owner.
For awhile, some manufacturers insisted on a “transfer fee,” but most of them have since changed their policies in an effort to improve customer satisfaction. When buying a used vehicle, you should know that any remaining factory warranty coverage (not aftermarket “service contracts” or extended warranties) still applies to the vehicle regardless of ownership.
Nevertheless, be aware that while warranty coverage may still exist, transfer of the warranty may still need to be completed before it goes into effect.
Understanding manufacturer’s standard warranties
At one time, the standard manufacturer’s warranty was 12 months or 12,000 miles, whichever came first. If anything broke during the first year of operation, it was fixed free of charge. There was no deductible.
After the initial time or mileage was exceeded, the warranty covered the “powertrain” (engine, transmission/transaxle, driveline, differential, rear axle, and transfer case, if equipped) up to 24 months or 24,000 miles. There was usually a $100 deductible.
This setup was the industry standard for decades. Eventually, this $100 deductible powertrain coverage was bumped up to 36 months or 36,000 miles. Later, as manufacturers began to view the warranty as a marketing device, they added the term bumper to bumper, usually for the length of 36/36,000.
A bumper-to-bumper warranty included all the items covered in the initial 12/12,000 warranty, but it included a $100 deductible.
The terms of standard warranties on today’s cars are longer than ever, both in miles and months. When you shop for a new vehicle, look closely at the actual written terms of the standard warranty. It should cover everything, including the powertrain, cosmetic things such as interior and exterior trim, and all electrical devices and systems.
It should also include a corrosion warranty, which covers all damage caused by rust. A competitive powertrain warranty should be at least 5 years or 50,000 miles, and some manufacturers are even going to 7/70,000.
Look for warranty coverage (sometimes as much as 100,000 miles) protecting the finish and/or the body from corrosion, rust and environmental fallout (rail dust, smog, factory emissions, acid rain, etc.).
When you’re buying a new vehicle, ask the salesman to show you the actual written terms of the warranty that comes with the vehicle. Ask whether you have any options, such as a choice between a higher-mileage warranty with a deductible versus an all-inclusive bumper-to-bumper warranty with no deductible, but shorter terms.
If your situation demands more coverage than the manufacturer offers, ask about extended warranties (or “service contracts,” as they’re called in the trade, which are available at additional cost.
What are extended warranties?
Extended warranties are sold through dealerships. They can be backed by either the manufacturer or by an aftermarket company. The cost of purchasing an extended warranty can be high, especially for trucks. Make sure you get your money’s worth.
The coverage spelled out in an extended warranty often “over-laps” the terms of the standard manufacturer’s warranty. During the initial period already covered by the manufacturer, the only additional benefit available may be the use of a rental vehicle during repairs.
Here’s another thing to think about: An extended warranty does not have to be purchased at the time you purchase a new vehicle. In most cases, you have 12 months or 12,000 miles (the terms of the original standard manufacturer’s warranty) to buy an extended warranty.
Ask the salesman for information regarding various extended warranty plans. Have him or her spell out in writing what you’ll be getting if you buy an extended warranty, and ask him to show you the difference between the manufacturer’s standard warranty and the extended warranty.
One final point: service managers at dealerships have the authority to make their own decisions regarding most standard warranty repairs. Any repairs coming under extended warranty coverage are subject to approval and inspection by the extended warranty representative, which can hold up your car for a while.
